Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
Researchers at the Massachusetts Institute of Technology have created a new crypto-routing scheme to speed up blockchain-based transactions.
Researchers at the Massachusetts Institute of Technology have created a new cryptocurrency-routing scheme to speed up blockchain-based transactions.
In an announcement on Jan. 30, MIT claimed that the new solution called “payment channel networks” (PCN) is able to notably reduce blockchain-based transaction times and even boost profits.
As explained, in PCN, transactions are performed with minimal involvement from the blockchain. “Pairs of PCN users form off-blockchain escrow accounts with a dedicated amount of money, forming a large, interconnected network of joint accounts. Users route payments through these accounts, only pinging the blockchain to establish and close the accounts, which speeds things up dramatically. Accounts can also collect a tiny fee when transactions get routed through them,” the release further read.
While traditional schemes use the shortest path possible to complete a transaction and do not consider a user’s balance, PCNs rely on bidirectional joint accounts, where payments can only be routed on channels with sufficient funds to perform the transactions.
This, according to the release, eliminates a scenario in which one of the users in the joint account handles too many transactions, which could result in a zero balance and make it impossible to route further transactions.
Splitting full transactions
Apart from PCN, the researchers introduced Spider, a technique that splits each full transaction into smaller “packets,” which could be transmitted across different channels at different rates. Vibhaalakshmi Sivaraman, one of the researchers, said:
“Shortest-path routing can cause imbalances between accounts that deplete key payment channels and paralyze the system [...] Routing money in a way that the funds of both users in each joint account are balanced allows us to reuse the same initial funds to support as many transactions as possible.”
In a series of recent transactions-related developments in the industry, tech giant IBM was awarded a patent for the development of a “self-aware token” designed to track and record events of an offline transaction. The proposed system relates to financial data processing in an electronic currency platform, as well as to processing e-commerce tokens, which involve offline transactions.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.